Wood v Insurance Australia Group Limited trading as NRMA Insurance (No 2)

In the matter of Wood v Insurance Australia Group Limited trading as NRMA Insurance (No 2), the plaintiff sought to vary a previous costs order, arguing that indemnity costs should be awarded due to alleged delinquency by the defendant. The case was heard in the Supreme Court of New South Wales. The primary legal issue before the court was whether the defendant's conduct warranted the award of indemnity costs, given that it had filed a submitting appearance under rule 6.11 of the Uniform Civil Procedure Rules 2005 (NSW). The court was required to determine if there were any relevant delinquencies or plainly unreasonable conduct by the defendant that justified such an award.

The court examined the principles and factors relevant to awarding costs against a party who has filed a submitting appearance, as well as those pertinent to awarding indemnity costs. It noted that there is no absolute rule that a submitting party will never be ordered to pay costs, and that the decision should be based on an appraisal of the circumstances of the case. Regarding indemnity costs, the court held that such an order is not punitive but compensatory, and is warranted when the unsuccessful party’s conduct was unreasonable or involved special or unusual features. The court found that in this case, there was no relevant delinquency by the defendant, and thus, the plaintiff's application for indemnity costs was not justified. As a result, the application to vary the costs order was dismissed.

The court's final order was that no variation to the costs order would be made. This decision reinforced the principle that indemnity costs should only be awarded in exceptional circumstances, and underscored the importance of assessing each case based on its unique facts and context.